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Rights

 
 

A security giving stockholders entitlement to purchase new shares issued by the corporation at a predetermined price (normally less than the current market price) in proportion to the number of shares already owned. Rights are issued only for a short period of time, after which they expire.

Investopedia Says:
This also known as "subscription rights" or "share purchase rights".

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Not sure what to do if a company invites you to buy more shares at discount? Here are some of your options. Understanding Rights Issues


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Privilege granted to existing shareholders of a corporation to subscribe to shares of a new issue of common stock before it is offered to the public; better known simply as a right. Such a right, which normally has a life of two to four weeks, is freely transferable and entitles the holder to buy the new common stock below the Public Offering Price. While in most cases one existing share entitles the stockholder to one right, the number of rights needed to buy a share of a new issue (called the subscription ratio) varies and is determined by a company in advance of an offering. To subscribe, the holder sends or delivers to the company or its agent the required number of rights plus the dollar price of the new shares.

Rights are sometimes granted to comply with state laws that guarantee the shareholders' Preemptive Right-their right to maintain a proportionate share of ownership. It is common practice, however, for corporations to grant rights even when not required by law; protecting shareholders from the effects of Dilution is seen simply as good business.

The actual certificate representing the subscription is technically called a Subscription Warrant, giving rise to some confusion. The term subscription warrant, or simply warrant, is commonly understood in a related but different sense-as a separate entity with a longer life than a right-maybe 5, 10, or 20 years or even perpetual-and with a Subscription Price higher at the time of issue than the Market Value of the common stock.

Subscription rights are offered to shareholders in what is called a Rights Offering usually handled by underwriters under a Standby Commitment.

 
Law Encyclopedia: Legal Right
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This entry contains information applicable to United States law only.

An interest that the law protects; an enforceable claim; a privilege that is created or recognized by law, such as the constitutional right to freedom of speech.

 
Wikipedia: Rights
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Rights are entitlements or permissions, usually of a legal or moral nature. Rights are of vital importance in the fields of law and ethics, especially theories of justice and deontology.

Contents

Theoretical distinctions

There are numerous different theoretical distinctions in accordance with which rights may be classified. Not all sources support both sides of every distinction listed here, e.g. Jeremy Bentham denied the existence of natural rights, holding all rights to be of a legal character, and Ayn Rand denied the existence of group rights, holding all rights to be of an individual character.

  • Natural rights and legal rights - There exists debate over the source of what many consider basic rights, such as the right to freedom of speech. On the one hand, these basic rights may be considered of a purely moral or ethical character, i.e., the idea of natural rights, which holds that certain rights derive from nature and cannot be modified by legislative authority. On the other hand, these basic rights may be considered to be of a purely posited nature, i.e., the idea of legal rights, which are arbitrary human constructs, created by legislative authority and subject to change. Other rights, such as that to access a lawyer or an abortion, avoid the question of this dichotomy by finding their validity pursuant to other, more basic rights, such as the right to due process in the case of the former, and the right to privacy in the latter.
    • Explicit rights and unenumerated rights - Explicit rights are those legal rights specifically granted by a governing body. Unenumerated rights are those legal rights that are not explicitly granted by the governing body. Considerable discussion and disagreement has occurred over unenumerated rights (what these rights include, what types of rights they are, and others).[citation needed]
  • Claim rights and liberty rights - A liberty right grants permission, e.g. freedom of speech, whereas a claim right grants an entitlement, e.g. the right to life. Claim rights and liberty rights might be thought of as necessarily imposing constraints or obligations on the other. On the one hand, claim rights restrict other agents' liberty rights to affect the object of the claim. For instance, a claim right to a trial by jury constrains a ruler's liberty right to unilaterally jail whomever he sees fit. On the other hand, a liberty right constrains (but does not totally preclude) the exercise of claim rights on all necessary conditions for the exercise of that liberty. Examples of this are difficult to establish because of the difficulty of establishing necessary conditions for exercising a particular liberty right. One possible modern example might be a liberty right to freedom of movement, which restricts the claim rights one might exercise over the roads (as a necessary condition for freedom of movement). It should also be noted that liberty rights, as permissions, are also known simply as liberties, but are still frequently referred to as rights (e.g. "I have a right to do x" often means "I am permitted to do x"), though some deny that such usage is proper.
  • Negative rights and positive rights - Negative rights require inaction from others (in the sense of rights as claims or entitlements), or permit inaction from the right bearer (in the sense of rights as liberties or permissions). Conversely, positive rights require action from others (in the sense of rights as claims or entitlements) or permit action from the right bearer (in the sense of rights as liberties or permissions).
  • Individual rights and group rights - Individual rights are rights pertaining to individuals, regardless of their membership within a group. Group rights, in contrast are held by an ensemble of people collectively, or by the members of a group of people who have a certain characteristic in common. In some cases there can be tension between individual and group rights. A classic instance in which group and individual rights clash is conflicts between unions and their members. For example, members of a union may wish to contract with the employer for a wage other than that negotiated by the union, but are unable to due to the union's control of the work sphere, sometimes referred to as a "closed shop."
  • Absolute rights and conditional rights - Absolute rights are those rights applied without contingencies. Conditional rights are granted only after meeting certain requirements. The ability to carry weapons might be a conditional right; the right to subsistence provisions might be an absolute right.[citation needed]

Other distinctions between rights draw more on historical association or family resemblance than on precise philosophical distinctions. These include the distinction between civil and political rights and economic, social and cultural rights, between which the articles of the Universal Declaration of Human Rights are often divided. Another conception of rights groups them into three generations. These distinctions have much overlap with that between negative and positive rights, as well as between individual rights and group rights, but these groupings are not entirely coextensive.

Areas of concern

Rights about particular issues, or the rights of particular groups, are often areas of special concern. Often these concerns arise when rights come into conflict with other legal or moral issues, sometimes even other rights.

Issues of concern include labor rights, LGBT rights, reproductive rights, disability rights, patient rights and prisoners' rights.

With increasing monitoring and the information society, information rights, such as the right to privacy are becoming more important.

Examples of groups whose rights are of particular concern include animals, and amongst humans, groups such as children and youth, parents (both mothers and fathers), and men and women.

History of rights and historic documents

The specific enumeration of rights accorded to people has historically differed greatly across space and time, and in many cases, the system of rights promulgated by one group can come into sharp and bitter conflict with that of other groups. In the political sphere, a place in which rights have historically been an important issue, at present the question of who has what legal rights is normally addressed by the constitutions of the respective nations.

Most historical notions of rights were authoritarian and hierarchical, with different people being granted different rights, and some having more rights than others. For instance, the rights of a father to be respected by his son did not indicate a duty upon the father to return that respect, and the divine right of kings to hold absolute power over their subjects did not leave room for many rights to be granted to the subjects themselves.

Modern conceptions of rights often emphasize liberty as among the most important of rights, though conceptions of liberty (e.g. positive vs negative) frequently differ.

The Magna Carta or "Great Charter" was one of England's first documents containing commitments by a sovereign to his people to respect certain legal rights. It reduced the power of the monarch.

Notable people

Lists

Individuals

See also

References

External links


 
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Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more
Law Encyclopedia. West's Encyclopedia of American Law. Copyright © 1998 by The Gale Group, Inc. All rights reserved.  Read more
Wikipedia. This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Rights" Read more